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No One Regulating Remittances

Toronto Preparing to meet with the ACORN International “intern army,” as I call them, at George Brown College today, I couldn’t help but laugh while using the Starbucks internet (thanks, fellas!) when I read that Jamie Dimon of JP Morgan Chase was over at Davos complaining about “banker bashing” and France’s President Sarkozy was forced to gently remind him that more than 10,000,000 people were still looking for work because of their shenanigans. Whose on first, what’s on second?

Which brings me to banks and money transfer organizations at the heart of ACORN International’s Remittance Justice Camapign, where it turns out that almost know one is on any base at all. It seems no wonder that the charges banks and MTOs have larded onto immigrant families efforts to send money to relatives in the home country are so predatory, because from our early research it appears that there is virtually no effort to regulate the movement of these payments at all. Of course there are some new post 9-11 efforts to hand slap some transactions to slow down terrorism, but nothing that would pay more than lip service to the predatory charges, fees, and exchange rates tacked on to remittances (see our report and sign the petition of support at www.remittancejustice.org).

National central banks are nominally in charge of regulating the kind of banks that Dimon thinks are being bashed, but have been silent or stumbling at best in even looking at the problems of consumers and costs. The United States Federal Reserve Bank has proven this time and time in so many areas of banking endeavor that this should come as no surprise. The Atlanta region is piloting an international automatic clearing house function so that businesses can move money more easily to Europe, but nothing for consumers. In Canada and the United States there is a patchwork quilt of confusion, where money transfer organizations like Western Union, MoneyGram and the scores of other outfits that have sprung up are nominally under the authority of individual states or provinces, many of which do little other than collect operating fees, but certainly don’t pretend to regulate these outfits and their cost structure. In some cases they worry that they may share authority for regulations, so the quandary is even more pronounced. The situation is more than a mess, it’s a pathetic tragedy costing immigrant working families billions that simply end up in the pockets of the much maligned financial industry.

The response to our inquires from BMO, the Bank of Montreal, has been indicative. After first pretending that they had already met our demands for charges not to exceed 5% by deftly arguing that if someone remitted thousands of dollars the costs would be lowered, despite the fact that most remittances are in the $100 level, they then tried to claim that they were working on costs. When we asked to meet and hear the progress, they then claimed it was “proprietary,” which might be a euphemism for “predatory” or could simply a fancy word for “buzz off.”

We seem to have little choice but to open up another front to move for regulations wherever we can get a hearing, while continuing to press the MTOs and bankers to do the right thing, which as Chase’s Dimon seems to indicate has about the same chance as a snowball in hell of moving bankers and their buddies.